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California to online retailers – it’s time to collect sales taxes

A man using a laptop computer.
A man using a laptop computer.
Juber Al-haddad ™/Flickr (cc by-nc-nd)

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Beginning tomorrow, a new state law is forcing out of state online businesses to collect sales tax on purchases by California customers. Until now online merchants were not obligated to charge this tax and the effect will be felt by small businesses and the affiliates of online retailers like Overstock and Amazon. The projected gain for the state could be as high as $317 million but how hard is this hitting the estimated 25,000 affiliates of these sites in California? According to industry organizations they will be losing up to 90 percent of their income in the stroke of a pen and many are considering leaving the state. Is this law going to lead to a mass exodus? Similar laws have passed in other states, what have the effects been there?


Rebecca Madigan, executive director, Performance Marketing Association

Dean Baker, Co-Director, Center for Economic and Policy Research

Thomas Swalla, COO of a West LA website considering leaving the state

Jonathan Johnson, President of O.CO, also known as